Create or set up your business in Switzerland
On December 1, 2020, we had the pleasure of organizing a webinar on the creation and establishment of a company in Switzerland.
In a few words for those who have not followed this webinar or who would not have time to see the Replay, we have summed it up in this post. The fundamental information is available even though nothing could replace our speakers talent and the richness of ideas emanating from their “live” interactions.
WEBINAR
On this occasion, to offer a useful content and a vision not only legal, but financial and conjunctural of the challenges of entrepreneurship in Switzerland to the participants, we were able to count on the valuable interventions of Mr. Patrick Hayoun, Director of the trustee Guggenheim & Associés , SA, Mr. Thierry Baglan, Director France of the economic promotion of Western Switzerland– Greater Geneva Bern area (GGBa), bringing together the cantons of Bern, Fribourg, Vaud, Neuchâtel, Geneva and Valais, whose mission is to support foreign companies so that they can quickly establish themselves and develop their activities in Western Switzerland.
Each of our speakers provided their advice and experience throughout this webinar, whose common thread of the themes addressed was as follows:
- The general context of business creation in Switzerland
- The different actors of business creation
- Presentation of the two main forms of company: the Société Anonyme and the Sàrl
- Preparation for the creation of your business
- Expert advice
1. The general context of business creation in Switzerland
Entrepreneurship in Switzerland is made up of 4,400 companies created in 2019 (+3%) in a very favorable and mature economic context. While the stability and security offered represent a benefit, the maturity of the Swiss economic fabric requires real preparation upstream before entering the market. It includes not only the product or service offered, but the “vehicle” through which they will be developed and marketed.
The great freedom offered to entrepreneurship by Swiss legislation means that the company must provide the company with a minimum capital when it is created, so as to finance the first months of its activity.
In this respect, the Swiss system offers almost no financial support for business creation, with the exception of Innosuisse, which intervention targets innovation projects and support for start-ups in science and in partnership with actors in scientific or technical research.
In the vast majority of cases, entrepreneurs must therefore provide for the financing of their project themselves.
Business creation:
The major difference between Switzerland and France.
The concepts of business creation in Switzerland and France are, on this point, the opposite, since in France a SAS for example, which structure is very close to that of an SA in Switzerland, can be created with less than EUR 500.-, where Swiss law requires for a Sàrl a minimum capital of CHF 20,000.- and CHF 100,000.- for a SA.
2. The different actors of business creation
In the order of their intervention, the key players in business creation are:
The entrepreneur and his project
A real reflection must be conducted. The maturity of the Swiss market requires us to be immediately fair in its positioning. In Switzerland, the difference and success are not won over the price, but the suitability for demand and the level of requirement applied to the product or service offered.
Nationality plays no role in setting up a business in Switzerland. Swiss law only requires that the company has a person in Switzerland with the power to represent it. In the case of an SA, the company must have at least one director domiciled in Switzerland with an individual signature. If the signature is collective of two, both directors must be domiciled in Switzerland. Similarly for a Sàrl, of which at least one representative with an individual signature must be domiciled in Switzerland, two if the right of signature must be exercised by two (collective signature).
The fiduciary
It is the essential partner analyzing the financial needs related to the projected activity and designing the appropriate business plan. Once the company is active, the fiduciary remains the essential interlocutor for all questions related to the company’s finances. It will indeed take care of the accounting of the company most of the time. It should be noted that the law requires, from certain thresholds, the appointment of an auditor, thus making the use of a trustee mandatory.
Given the stakes, at least one of the fiduciary’s collaborators should ideally have a training as a chartered accountant.
The lawyer
Some think that legal advice is expensive. The fact is that the costs of a court proceeding are even more so. The legal issues surrounding the creation of a business are very varied: advice on the choice of form; internal organization within the management circle; content of the commercial contracts surrounding the marketing of the project; intellectual property rights; administrative authorization procedure; labour law issues, etc. Taking advice from a professional, during the creation and at each stage of the development of the company, is never a waste of money or time. This very often makes it possible to avoid or anticipate serious problems that can sometimes lead to bankruptcy. Don’t wait until you fall into the water, or be pushed into it, to learn to swim!
Get in touch with us, we will gladly support you in your business creation project.
Economic promotion
To put all the chances on your side, it is essential to master all the factors that will influence the development of your company’s activity. Among these factors, the cyclical and structural climate of the establishment and marketing sector plays a decisive role. Switzerland offers a range of culture, sensibilities and tastes that no longer need to be demonstrated. However, access to the richness offered by this diversity and the potential it represents cannot be improvised. The challenge of implementation is already great from one canton to another. When it comes to crossing the border, it is essential for the foreign entrepreneur to request information from professionals who have a perfect knowledge of the local economic and cultural fabric.
The bank
As we have seen, the Swiss system offers almost no support for business creation. Banking institutions are therefore the essential partners of any entrepreneur. Funding conditions can be highly variable and require careful consideration. Whatever the amount, a request for financing involves submitting to the bank a complete and serious file of the various aspects of the project. The fiduciary and the lawyer also play an important role here and make it possible to significantly streamline the examination of the application by their respective skills in the matter and their experience of the financing process, as well as its actors.
The notary
It is simply essential to constitute a company registered in the Trade Register. If company law is federal, the instrumentation of the company’s instruments of incorporation by the notary and the cost of his intervention are cantonal competences and therefore variable.
The commercial register
It is the equivalent of the Register of civil status for persons. Each canton has a Commercial Register Office to which requisitions concerning companies located in that canton ought to be addressed. Publications are centralized at and by the Federal Office of the Commercial Register. When management request a registration for its company, the publication in the Commercial Register confers the effects and therefore the legal scope to the entreprise.
3. Presentation of the two main forms of company: SA and Sàrl
The public limited company (SA) and the limited liability company (Sàrl) are the two main forms of legal persons in Switzerland. They are in fact almost identical in terms of their constitution and structure. They may be created by a single shareholder: SA or managing partner: Sàrl. Incorporation costs and taxation depend on the choice of the canton for the registered office.
The two major differences between SA and Sàrl in Switzerland:
1) Transparency relating to the identity of their beneficiary:
The name (s) of the shareholder (s), the proportion of shares held by each are not registered in the Commercial Register, while the name of the partner and the number of shares held are registered in the case of the partners of a Sàrl.
2) The initial minimum amount of the share capital:
It is CHF 20’000.- for a Sàrl and CHF 100’000.- for a SA. The law states that the capital of the SA can be partially paid up so CHF 50’000.-. This option is to be avoided. We advise you to fully release the capital. Indeed, in the event of financial losses, the balance will be called and if the shareholder does not have the necessary financial means, he personally exposes himself in the capacity of his assets, thus rendering inoperative the protective screen offered by the legal person.
4. How to prepare for the creation of your company in Switzerland
In addition to the purpose, name and registered office of the company, as well as the method of release of the share capital, the creation of a company involves above all choosing carefully its partners and advisors.
Friendship does not prevent difficulties and rarely resists them.
The relationship between the minds that designed the project can, when it deteriorates – which is often the case when it is a success and money begins to come in, but also when it is a failure and money begins to run out – lead to significant road blocks in the direction of the enterprise, or even to the death of it.
It is therefore necessary to pay particular attention to the choice of the other shareholders or partners. The shareholders agreement is an indispensable tool here. Many models are available for free on the internet. However, in spite of their requisite character, clauses relating to the exit or exclusion of a shareholder or a partner and therefore to the buyback of his shares, appear only very rarely.
Similarly, the composition and powers of the members of the Board of Directors of an SA must be clearly defined. They are the management body of the public limited company and as such, have the responsibility and power to commit it legally and financially with all the consequences that this implies for the sustainability and development of the activity.
5. Conclusion
No diploma is required to set up a business in Switzerland. On the other hand,
1) An idea and solid reflections to make it a reality;
2) Competent and reliable partners to market it as well as
3) Wise advisors to accompany the company at each stage of its development, are essential to the launch of the project and its success.
Bonus: checklist of business creation!
We put at your disposal our checklist of business creation. Ask info@wattlaw.ch for the document
To realize your business creation project find the contact details of the 3 stakeholders:
Vincent Tattini
Founding lawyer commercial
Specialized in law
vtattini@wattlaw.ch
T +41 22 809 03 03
Patrick Hayoun
CEO – founder – Fiduciaire
phayoun@ggh.biz
T +41 22 707 91 91
Thierry Baglan
Director France Economic Promotion (GGBa)
t.baglan@ggba-switzerland.ch
T +33 6 07 74 27 08
